LONDON – Western countries pledged tens of billions of dollars in new financial aid on Wednesday to rebuild war-torn Ukraine, at a two-day donors’ conference convened by the British government in the shadow of Kiev’s counter-offensive against Russia.
The pledges — made by Britain, the United States and the European Union — sought to divert public attention, for the moment, from the battlefield to the reconstruction of Ukraine that would follow the war. Economists estimate that the rebuilding project could cost between $400 billion and $1 trillion.
The conference also highlighted potential Use of confiscated Russian assets to underwrite the cost of reconstruction – a legally tricky proposal that is nevertheless gaining momentum in the West. Britain and the European Union are exploring ways to transfer these assets, which are estimated to be worth at least $300 billion.
Opening the conference, British Prime Minister Rishi Sunak said: “As we saw in Bakhmut and Mariupol, what Russia cannot bear will seek to destroy.” They want to do the same with the Ukrainian economy. “
Speaking to participants via video link, Ukrainian President Volodymyr Zelensky said there was an economic opportunity in his country’s ruins. He thanked the donors but implored them to start investing now. “We must move from vision to agreements, and from agreements to real projects,” he said.
Britain announced a package including 240 million pounds ($305 million) in additional direct economic aid and $3 billion in World Bank loan guarantees. The loans aim to encourage an influx of new private investment to rebuild Ukrainian cities and towns destroyed by Russian forces.
The European Union has put together an ambitious package that would include 50 billion euros (about $55 billion) in aid from 2024 to 2027. About 17 billion euros will come in the form of grants, and the rest in low-interest loans. The package must be approved by all 27 members of the block, however, it may run into hurdles.
“This plan can become a pillar for all international donors,” said Ursula von der Leyen, President of the European Commission. “This is what I mean when I say we are with Ukraine for as long as possible.”
The United States has announced $1.3 billion in additional economic aid, roughly split between money to repair Ukraine’s badly damaged energy infrastructure and to upgrade ports, railways and border crossings.
“As Russia continues to destroy, we’re here to help Ukraine rebuild,” said Secretary of State Antony Blinken, noting that the package had bipartisan support in Congress. “Recovery is about laying the foundation for Ukraine’s prosperity.”
Mr. Blinken said the United States has provided more than $20 billion in economic development assistance to Ukraine, in addition to $2.1 billion in humanitarian assistance. It is also the largest provider of military aid to the Ukrainian military.
Britain, which is also one of the largest providers of military aid to Ukraine, is taking advantage of London’s status as a global center for finance and insurance to stimulate foreign investment, in part by trying to reduce risks for investors. Sunak said the $3 billion in loan guarantees span three years and are backed by more than 400 companies from 38 countries, including Virgin, Sanofi, Philips and Hyundai Engineering.
Although fighting continues in southern and eastern Ukraine, analysts said it is important to start planning for the post-war rebuilding process, to avoid the kind of delays that impeded Europe’s post-WWII reconstruction.
“Without any kind of planning, these delays can fester, and they can lead to human misery and failing economies and fundamentally failing foreign policy,” Howard Schatz, chief economist at the Rand Corporation, told reporters last week. “So it’s important to start planning now.”